Judges reinstated an earlier order protecting Greenhouse Gas Reduction Fund grants, while giving the EPA time to seek Supreme Court intervention in the high-stakes climate funding dispute.
A US federal appeals court ruled on Tuesday that the Trump administration likely acted unlawfully when it sought to cancel a multibillion-dollar clean energy programme, dealing a setback to President Donald Trump’s wider effort to dismantle Biden-era climate policies.
The full US Court of Appeals for the District of Columbia said the Environmental Protection Agency could not freeze roughly $20 billion in grants awarded to nonprofit organisations for clean energy projects, reversing an earlier ruling by a three-judge panel of the same court.
The funds will not be released immediately, however. The decision has been temporarily suspended to allow the EPA to ask the US Supreme Court to intervene.
The legal dispute centres on the Greenhouse Gas Reduction Fund, which Congress established through former US President Joe Biden’s 2022 Inflation Reduction Act.
Often described as a “green bank”, the programme was designed to provide federal funding to nonprofit organisations that would issue loans and invest in small energy projects, energy-efficient buildings and clean energy infrastructure.
EPA Administrator Lee Zeldin has sought to dismantle the programme, saying it does not align with the agency’s priorities and accusing recipients of fraud, waste and mismanagement.
In a video posted on social media last February, Zeldin portrayed the fund as an example of government waste.
“Shockingly, roughly $20bn of your tax dollars were parked at an outside financial institution by the Biden EPA,” he said. “This pot of $20bn was awarded to just eight entities that were then responsible for doling out your money to NGOs and others at their discretion.”
“The days of irresponsibly shovelling boatloads of cash to far-left activist groups in the name of environmental justice and climate equity are over,” he added.
The following month, the EPA froze billions of dollars held at Citibank for distribution through the grant programme.
The organisations, including the Climate United Fund, Coalition for Green Capital and three others, denied wrongdoing and filed a lawsuit. They argued that the administration was illegally withholding funds already authorised by Congress and attempting to eliminate the programme because it opposed its climate objectives, rather than because of evidence of fraud.
Tuesday’s ruling overturned a decision issued last September by a three-judge panel of the appeals court that had sided with the administration.
The full appeals court later agreed to reconsider the case, a rare step generally reserved for matters of major significance.
A majority of the judges said the EPA’s attempt to terminate the grants and recover the money “based solely on a policy disagreement” likely violated the Inflation Reduction Act.
The court also said the agency had not provided assurances that it would leave the funds untouched if the injunction blocking its actions were lifted.
The ruling reinstated an order issued last year by US District Judge Tanya Chutkan, who found that the EPA had failed to justify cancelling the grants. She also warned that the administration was encroaching on Congress’s authority to determine how federal funds are spent.
The dispute is one of several legal challenges to Trump’s efforts to reverse Biden’s climate agenda.
Since returning to office, Trump has rolled back environmental regulations, expanded support for fossil fuel production and sought to unwind clean energy initiatives, arguing that they impose unnecessary costs on businesses and consumers.
Source: ALJAZEERA
